Vanguard expects stable demand for this quarter

By Ted Chen / Staff reporter

Fri, Feb 09, 2018 - Page 12

Revenue is expected to reach between NT$6.2 billion and NT$6.6 billion (US$211 million and US$224.6 million) this quarter, Vanguard vice president D. L. Tseng (曾棟樑) told an investors’ conference in Taipei.

Compared with NT$6.37 billion last quarter, that would represent a sequential decline of 2.7 percent or a gain of 3.5 percent.

Gross margin is forecast to range between 31 and 33 percent, and operating margin between 20 and 22 percent, Tseng said.

The company’s 8-inch production capacity would remain tight, and its global peers would face similar shortages in the next few years, driven by a continued increase in demand for the Internet of Things and power management applications, Vanguard chairman Fang Leuh (方略) said.

The company is also seeing rising demand for fingerprint sensors, as well as display drivers for both larger and smaller-sized panels, Fang said.

“The shortage is a healthy development that has motivated the entire supply chain to share the burden of higher 8-inch wafer prices,” Fang said, adding that the situation would boost capacity utilization and help support margins.

A capacity shortfall due to 8-inch wafer makers migrating to 12 inches is not expected to be filled in the near term, Fang said.

The company did not rule out building a fourth foundry, and said that its capital expenditure would increase from NT$1.8 billion last year to NT$2.1 billion this year.

The company’s investments into gallium nitride semiconductor technology could begin to bear fruit this year as it delivers its first samples to customers in upcoming months, Fang said.

A new solar panel could yield efficiency gains of 2 percent, which could mean significant improvements over a full year of operation, Vanguard said, adding that the technology could enhance power management applications for servers.

Vanguard reported that its net income last year rose 18.7 percent annually to NT$4.51 billion.